A lender generally cannot accelarate a note at its whim. Traditionally (by common law) there have been stringent requirements before a lender may accelarte. Those duties are generally subject to waiver, but the courts look closely at the waiver language, and interpret the language strictly. Notes are also split between common law rules and UCC rules. Even so, keep in mind that courts have applied UCC rules to common law cases.
Under the Texas Uniform Commercial Code (UCC 3.501), a demand upon the maker of a promissory note to pay the note is called presentment,. However, Sydnor (1854) considered presentment to be presentment of the note, and a demand for payment was a separate concept. “However, presentment to the maker of a note is required before the note holder can exercise an optional right to accelerate the time for any payment due on the note.”
The note holder must also notify the maker both of his intent to accelerate and of the acceleration. Shumway gives the reader some acceptable and unacceptable waiver language. As seen below, notice may be waived, but certain law prescribes specific language to be used in a waiver, such as in a motor vehicle contract.
“As early as 1854, and as recently as 1982, this Court has recognized that parties to a promissory note can waive presentment and notice. (citing Sydnor v. Gascoigne, 11 Tex. 449, 456 (1854); Ogden, 640 S.W.2d at 233.) …We hold, therefore, that a waiver of presentment, notice of intent to accelerate, and notice of acceleration is effective if and only if it is clear and unequivocal. To meet this standard, a waiver provision must state specifically and separately the rights surrendered. Waiver of “demand” or “presentment”, and of “notice” or “notice of acceleration”, in just so many words, is effective to waive presentment and notice of acceleration. See, e.g., Real Estate Exchange, Inc v. Bacci, 676 S.W.2d 440, 441 (Tex.App.—Houston [1st Dist.] 1984, no writ) (holder “shall have the option without demand or notice to the maker … to declare this note immediately due”); Slivka v. Swiss Avenue Bank, 653 S.W.2d 939, 940–41 (Tex.App.—Dallas 1983, no writ) (under deed of trust, entire debt “shall, at the option of the Noteholder, become at once due and payable without demand or notice”); Whalen v. Etheridge, 428 S.W.2d 824, 827 (Tex.Civ.App.—San Antonio 1968, writ ref’d n.r.e.) (holder may declare entire note “immediately due and payable without notice,” and maker “waives demand, grace, notice, presentment for payment and protest”); Phillips v. Whiteside, 426 S.W.2d 350, 351 (Tex.Civ.App.—Houston [14th Dist.] 1968, no writ) (holder shall have the option “without demandand notice to the maker” to accelerate maturity, and maker waived notice and presentation for payment). Likewise, a waiver of “notice of intent to accelerate” is effective to waive that right. See, e.g., Valley v. Patterson, 614 S.W.2d 867, 871–72 (Tex.Civ.App.—Corpus Christi 1981, no writ) (notice of intent to accelerate is waived when note specifically states that maker “expressly waivesall notices, demands for payment, presentations for payment, notices of intention to accelerate the maturity [,] protest and notice of protest”); Interstate Life Ins. Co. v. Turner, 371 S.W.2d 913, 916 (Tex.Civ.App.—Waco 1963, writ ref’d n.r.e.) (same result on language identical to that in Valley ). [paragraph indent added]
However, waiver of “notice” or “notice of acceleration” does not waive notice of intent to accelerate, a separate right.7 See Bodiford v. Parker, 651 S.W.2d 338, 339 (Tex.App.—Fort Worth 1983, no writ) (broad language—“the entire indebtedness … may, at the option of the Beneficiary, … be immediately matured and become due and payable without demand and notice of any character”—held insufficient to waive notice of intent to accelerate). Waiver of “notice” or even “all notice” or “any notice whatsoever”, without more specificity, does not unequivocally convey that the borrower intended to waive both notice of acceleration and notice of intent to accelerate, two separate rights. We disapprove cases that have reached contrary results. E.g., Stricklin v. Levine, 750 S.W.2d at 815–16 (waiver of “demand or notice” in deed of trust and waiver of “demand, presentment for payment, notice of non-payment, protest, and notice of protest” in note held sufficient to waive notice of intent to accelerate); Mercer v. Bludworth, 715 S.W.2d at 698–99 (notice of intent to accelerate not required since note provided for option to accelerate “without demand or notice” and deed of trust provided for acceleration “with or without notice to First Party”); Emfinger v. Pumpco, Inc., 690 S.W.2d at 90 (notice of intent to accelerate held waived by clause providing that “[f]ailure to exercise this option [to accelerate] upon any default shall not constitute a waiver of the right to exercise it in the event of any subsequent default”); Real Estate Exchange v. Bacci, 676 S.W.2d at 441 (holder was “under no legal duty to notify [the maker] of its intention to accelerate”; note provided for option to accelerate “without demand or notice” and contained waiver of “grace, protest, notice and presentation for payment”); Cortez v. Brownsville Nat’l Bank, 664 S.W.2d at 809 (waiver of “Notice, Presentment for Payment, Demand for Payment and Acceleration of Maturity, and Protest” held sufficient to waive notice of intent to accelerate); Slivka v. Swiss Avenue Bank, 653 S.W.2d at 941 (waiver of “demand, presentment and notice” held sufficient to waive notice of intent to accelerate); Chapa v. Herbster, 653 S.W.2d at 601 (broad language providing for acceleration “at the option of the Payee or other holder hereof, without presentment or demand or any notice to the Maker”, and waiving “demand, presentment for payment, notice of nonpayment, protest, notice of protest and all other notice” held sufficient to waive all required notice).” Shumway v. Horizon Credit Corp., 801 S.W.2d 890, 893 (Tex. 1991).
So the common law rights of a maker are clear and unequivocal 1) presentment (a demand to pay the note) before acceleration. The note holder must also clearly and unequivocally notify the maker of his 2) intent to accelerate and 3) notice of his acceleration